Karl-Martin Ehrhart - Academia.edu (original) (raw)

Papers by Karl-Martin Ehrhart

Economics of Energy & Environmental Policy, 2021

SSRN Electronic Journal, 2019

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Energy Policy, 2017

Auctions are a promising tool to accomplish renewable energy support (RES). However, they involve... more Auctions are a promising tool to accomplish renewable energy support (RES). However, they involve diverse risks for the auctioneer and the bidders. The major risk for the auctioneerwith respect to the expansion target and the acceptance of auctions for RES in generalis the risk of non-realization: awarded bidders do not realize their projects. The main reasons are bidders' uncertainties concerning their project costs. The auctioneer can reduce the non-realization risk by taking various measures. The most discussed and implemented measures are financial and physical prequalifications and penalties. An evaluation of these measures has relevant implications for an appropriate auctions design for RES. The non-realization option induces lower bids. A suitable combination of financial and physical prequalifications can reduce the non-realization risk significantly, however, involves sunk costs. Counterintuitively, first-price auction and second-price auction lead to different expected award prices and different realization probabilities. Penalties bear a high risk of inefficient auction outcomes. The appropriate parametrization and combination of the measures is challenging. Under consideration of all implications, we recommend high financial and adjusted physical prequalifications to achieve a sufficiently high realization rate while maintaining efficiency.

Springer-Lehrbuch, 2010

Das Verhandlungsproblem ist ein in der ökonomischen Theorie relevantes Problem, für das eine befr... more Das Verhandlungsproblem ist ein in der ökonomischen Theorie relevantes Problem, für das eine befriedigende, theoretische Lösung lange Zeit gesucht wurde. Es ist dadurch gekennzeichnet, dass mehrere Wirtschaftssubjekte zwar ein gemeinsames Interesse an einer Einigung bzgl. eines Verhandlungsgegenstandes haben, dass sie aber individuell sehr unterschiedliche Einigungsresultate herbeiführen wollen.

Frontiers in Economics, 2002

The chapter “Game Theory and Experimental Economics” shows various possibilities of applying meth... more The chapter “Game Theory and Experimental Economics” shows various possibilities of applying methods of game theory and experimental methods to the field of economic consulting. The selected topics have been chosen because they provide a useful object of analysis within this context and at the same time, because they are among our central research interests. This work does not cover the aforementioned topic in the fullest detail. For example, cooperative game theory and its applications are not discussed. As regards non-cooperative game theory, not all aspects and fields can be mentioned here.

Springer-Lehrbuch, 2010

Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliograf... more Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

This paper investigates possible abuses of the EU emissions trading law for tacit collusion purpo... more This paper investigates possible abuses of the EU emissions trading law for tacit collusion purposes of firms. We focus on collusive behavior which is eective on the product market, but which originates from the misuse of EU emissions trading institutions. We develop two simple game theoretic models that analyze such loopholes which enable oligopolists on the product market to restrict their output, even if the firms are only price takers on the permits market. This misuse leads to increasing firm profits, decreasing consumers' surplus and overall negative eects on social welfare. Therefore, the well known positive eects of emissions trading should not mislead public authorities to ignore the possible misuse of some options of the European emissions trading law as e.g. pooling or project based mechanisms.

A population of players is considered in which each agent can select her neighbors in order to pl... more A population of players is considered in which each agent can select her neighbors in order to play a 2 × 2 Hawk-Dove game with each of them. We design our experiment in continuous time where participants may change their Hawk-Dove action and/or their neighborhood at any point in time. We are interested in the resulting formation of networks and the action distributions. Compared with static Nash equilibrium (e.g., Berninghaus and Vogt, 2004, 2006; Bramoullé, López-Pintado, Goyal, and Vega-Redondo, 2004) and social optimum as theoretical benchmark solutions, subjects seem to employ a more complex, forward-looking thinking. We develop an other benchmark solution, called one-step-ahead stability, that combines forward-looking belief formation with rational response and that fits the data much better.

Organizational Behavior and Human Decision Processes, 2004

In strategic decision situations, as modeled in games, the outcome depends on all decision-makers... more In strategic decision situations, as modeled in games, the outcome depends on all decision-makers involved. In such situations, people make different decisions when they move simultaneously as compared to when they move sequentially without knowledge of prior moves. This is called the timing effect, which is not predicted by classic game theory. We hypothesize that pseudo-sequential game structures activate concepts of social interactions, which in turn increase individualÕs interpersonal trust and decreases cautiousness in situations of interdependence. Simultaneous game structures are more likely to activate concepts of games of chances, as a consequence of which the possibility of an actual total loss is more salient. In four experiments, participants played a coordination game either simultaneously or pseudo-sequentially. We manipulated processing time (Experiment 1), assessed participantsÕ perception of game features (Experiment 2), manipulated activation of concepts such as social interaction (Experiment 3), and asked participants what decision they make being in a social interaction or a game of a chance (Experiment 4). The results support our hypothesis that different cognitive processes, which either intensify or diminish the focus on the other person, mediate the timing effect. In Experiment 5 we reversed the timing effect by embedding the game in a competitive context.

Journal of Experimental Social Psychology, 2005

In public good situations, expectations concerning other personsÕ moves are important and subtle ... more In public good situations, expectations concerning other personsÕ moves are important and subtle cues can affect these expectations. In Experiment 1, participants in a public good game who moved simultaneously made high contributions and expected their opponents to make high contributions. However, participants who moved pseudo-sequentially (one after the other, but without knowledge of the otherÕs decision) expected their opponents to make medium-sized contributions, but made almost no contribution themselves. In Experiment 2, we manipulated expectations experimentally. Participants who moved simultaneously reciprocated what they expected their partners to do. Participants who moved pseudo-sequentially defected, regardless of what they expected from their opponents. Furthermore, we found that simultaneous movers were more likely than pseudo-sequential movers to conceptualize themselves and the other player as a group. This sense of groupness seemed to account partly for their inclination to reciprocate anticipated behavior.

Journal of Economic Behavior & Organization, 1998

We analyze the impact of the number of repetitions of a simple coordination game on equilibrium s... more We analyze the impact of the number of repetitions of a simple coordination game on equilibrium selection. Results of computerized coordination experiments with varying number of iterations show that the Pareto dominant equilibrium is selected already after a few periods when the number of iterations is sufficiently large. Our results can be partly explained by a particular version of thè learning direction theory'. Furthermore, we present a new framework for experimental design in real time.

German Economic Review, 2005

This paper analyses the auction designs chosen for awarding 3G licences in the UK and Germany and... more This paper analyses the auction designs chosen for awarding 3G licences in the UK and Germany and compares them with respect to revenues and bidders’ surplus using a laboratory experiment. In our study with a given number of bidders, the German design leads to higher revenues. However, bidder surplus in the German design is lower and bidders face a severe exposure problem. Because this might discourage participation, it will probably lead to less competitive bidding in real applications.

Games and Economic Behavior, 2007

This paper studies budget processes, both theoretically and experimentally. We compare the outcom... more This paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. Ferejohn and Krehbiel (1987) showed theoretically that this need not be the case. We test experimentally the theoretical predictions of their work. The evidence from these experiments lends strong support to their theory, both at the aggregate and the individual subject level.

Games and Economic Behavior, 2002

Ce document est publié dans l'intention de rendre accessibles les résultats préliminaires de la r... more Ce document est publié dans l'intention de rendre accessibles les résultats préliminaires de la recherche effectuée au CIRANO, afin de susciter des échanges et des suggestions. Les idées et les opinions émises sont sous l'unique responsabilité des auteurs, et ne représentent pas nécessairement les positions du CIRANO ou de ses partenaires. This paper presents preliminary research carried out at CIRANO and aims at encouraging discussion and comment. The observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of CIRANO or its partners.

Economics of Energy & Environmental Policy, 2021

SSRN Electronic Journal, 2019

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Energy Policy, 2017

Auctions are a promising tool to accomplish renewable energy support (RES). However, they involve... more Auctions are a promising tool to accomplish renewable energy support (RES). However, they involve diverse risks for the auctioneer and the bidders. The major risk for the auctioneerwith respect to the expansion target and the acceptance of auctions for RES in generalis the risk of non-realization: awarded bidders do not realize their projects. The main reasons are bidders' uncertainties concerning their project costs. The auctioneer can reduce the non-realization risk by taking various measures. The most discussed and implemented measures are financial and physical prequalifications and penalties. An evaluation of these measures has relevant implications for an appropriate auctions design for RES. The non-realization option induces lower bids. A suitable combination of financial and physical prequalifications can reduce the non-realization risk significantly, however, involves sunk costs. Counterintuitively, first-price auction and second-price auction lead to different expected award prices and different realization probabilities. Penalties bear a high risk of inefficient auction outcomes. The appropriate parametrization and combination of the measures is challenging. Under consideration of all implications, we recommend high financial and adjusted physical prequalifications to achieve a sufficiently high realization rate while maintaining efficiency.

Springer-Lehrbuch, 2010

Das Verhandlungsproblem ist ein in der ökonomischen Theorie relevantes Problem, für das eine befr... more Das Verhandlungsproblem ist ein in der ökonomischen Theorie relevantes Problem, für das eine befriedigende, theoretische Lösung lange Zeit gesucht wurde. Es ist dadurch gekennzeichnet, dass mehrere Wirtschaftssubjekte zwar ein gemeinsames Interesse an einer Einigung bzgl. eines Verhandlungsgegenstandes haben, dass sie aber individuell sehr unterschiedliche Einigungsresultate herbeiführen wollen.

Frontiers in Economics, 2002

The chapter “Game Theory and Experimental Economics” shows various possibilities of applying meth... more The chapter “Game Theory and Experimental Economics” shows various possibilities of applying methods of game theory and experimental methods to the field of economic consulting. The selected topics have been chosen because they provide a useful object of analysis within this context and at the same time, because they are among our central research interests. This work does not cover the aforementioned topic in the fullest detail. For example, cooperative game theory and its applications are not discussed. As regards non-cooperative game theory, not all aspects and fields can be mentioned here.

Springer-Lehrbuch, 2010

Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliograf... more Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

This paper investigates possible abuses of the EU emissions trading law for tacit collusion purpo... more This paper investigates possible abuses of the EU emissions trading law for tacit collusion purposes of firms. We focus on collusive behavior which is eective on the product market, but which originates from the misuse of EU emissions trading institutions. We develop two simple game theoretic models that analyze such loopholes which enable oligopolists on the product market to restrict their output, even if the firms are only price takers on the permits market. This misuse leads to increasing firm profits, decreasing consumers' surplus and overall negative eects on social welfare. Therefore, the well known positive eects of emissions trading should not mislead public authorities to ignore the possible misuse of some options of the European emissions trading law as e.g. pooling or project based mechanisms.

A population of players is considered in which each agent can select her neighbors in order to pl... more A population of players is considered in which each agent can select her neighbors in order to play a 2 × 2 Hawk-Dove game with each of them. We design our experiment in continuous time where participants may change their Hawk-Dove action and/or their neighborhood at any point in time. We are interested in the resulting formation of networks and the action distributions. Compared with static Nash equilibrium (e.g., Berninghaus and Vogt, 2004, 2006; Bramoullé, López-Pintado, Goyal, and Vega-Redondo, 2004) and social optimum as theoretical benchmark solutions, subjects seem to employ a more complex, forward-looking thinking. We develop an other benchmark solution, called one-step-ahead stability, that combines forward-looking belief formation with rational response and that fits the data much better.

Organizational Behavior and Human Decision Processes, 2004

In strategic decision situations, as modeled in games, the outcome depends on all decision-makers... more In strategic decision situations, as modeled in games, the outcome depends on all decision-makers involved. In such situations, people make different decisions when they move simultaneously as compared to when they move sequentially without knowledge of prior moves. This is called the timing effect, which is not predicted by classic game theory. We hypothesize that pseudo-sequential game structures activate concepts of social interactions, which in turn increase individualÕs interpersonal trust and decreases cautiousness in situations of interdependence. Simultaneous game structures are more likely to activate concepts of games of chances, as a consequence of which the possibility of an actual total loss is more salient. In four experiments, participants played a coordination game either simultaneously or pseudo-sequentially. We manipulated processing time (Experiment 1), assessed participantsÕ perception of game features (Experiment 2), manipulated activation of concepts such as social interaction (Experiment 3), and asked participants what decision they make being in a social interaction or a game of a chance (Experiment 4). The results support our hypothesis that different cognitive processes, which either intensify or diminish the focus on the other person, mediate the timing effect. In Experiment 5 we reversed the timing effect by embedding the game in a competitive context.

Journal of Experimental Social Psychology, 2005

In public good situations, expectations concerning other personsÕ moves are important and subtle ... more In public good situations, expectations concerning other personsÕ moves are important and subtle cues can affect these expectations. In Experiment 1, participants in a public good game who moved simultaneously made high contributions and expected their opponents to make high contributions. However, participants who moved pseudo-sequentially (one after the other, but without knowledge of the otherÕs decision) expected their opponents to make medium-sized contributions, but made almost no contribution themselves. In Experiment 2, we manipulated expectations experimentally. Participants who moved simultaneously reciprocated what they expected their partners to do. Participants who moved pseudo-sequentially defected, regardless of what they expected from their opponents. Furthermore, we found that simultaneous movers were more likely than pseudo-sequential movers to conceptualize themselves and the other player as a group. This sense of groupness seemed to account partly for their inclination to reciprocate anticipated behavior.

Journal of Economic Behavior & Organization, 1998

We analyze the impact of the number of repetitions of a simple coordination game on equilibrium s... more We analyze the impact of the number of repetitions of a simple coordination game on equilibrium selection. Results of computerized coordination experiments with varying number of iterations show that the Pareto dominant equilibrium is selected already after a few periods when the number of iterations is sufficiently large. Our results can be partly explained by a particular version of thè learning direction theory'. Furthermore, we present a new framework for experimental design in real time.

German Economic Review, 2005

This paper analyses the auction designs chosen for awarding 3G licences in the UK and Germany and... more This paper analyses the auction designs chosen for awarding 3G licences in the UK and Germany and compares them with respect to revenues and bidders’ surplus using a laboratory experiment. In our study with a given number of bidders, the German design leads to higher revenues. However, bidder surplus in the German design is lower and bidders face a severe exposure problem. Because this might discourage participation, it will probably lead to less competitive bidding in real applications.

Games and Economic Behavior, 2007

This paper studies budget processes, both theoretically and experimentally. We compare the outcom... more This paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. Ferejohn and Krehbiel (1987) showed theoretically that this need not be the case. We test experimentally the theoretical predictions of their work. The evidence from these experiments lends strong support to their theory, both at the aggregate and the individual subject level.

Games and Economic Behavior, 2002

Ce document est publié dans l'intention de rendre accessibles les résultats préliminaires de la r... more Ce document est publié dans l'intention de rendre accessibles les résultats préliminaires de la recherche effectuée au CIRANO, afin de susciter des échanges et des suggestions. Les idées et les opinions émises sont sous l'unique responsabilité des auteurs, et ne représentent pas nécessairement les positions du CIRANO ou de ses partenaires. This paper presents preliminary research carried out at CIRANO and aims at encouraging discussion and comment. The observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of CIRANO or its partners.